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tv   Your Business  MSNBC  April 8, 2012 7:30am-8:00am EDT

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small businesses struggle with rising gas prices. entrepreneurs fulfill their dreams of opening a small business in china. and check out the chicken limo in indianapolis. those stories and more, coming up next on "your business." small businesses are revitalizing the company and american express open is here to help. that's why we are proud to present "your business" on msnbc. hi there, everyone. i'm j.j. ramberg and welcome to "your business" where we give you tips and advice to help your business grow.
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gas prices are an issue yet again. at this time of year when the cost of fuel is typically lower, business owners are facing an unexpected problem. they're trying to find ways to keep their expenses down while the price at the pump keeps going up. >> i have two choices, raise the price a little bit more or, as many small business people do, you eat it. just say, okay, it'll change. >> carmen, the owner this family business says the cost of gas is crucial. >> our niche is be delivery and handle deliveries. a flower shop is the only place in america where you can place an order at 11:00, have it custom manufactured and delivered anyplace in the u.s. and canada in the same working
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day. >> with at least one delivery van on the road every day and higher fees from his suppliers, the rising price of gas is a reality that he'd rather not be facing. >> i grew up when gas was 24 cents a gallon and we thought that was high. and, yes, it is a very challenging thing. >> carmen, his daughter jessica, the shop's floral manager and drivers spend plenty of time crunching numbers, trying to save cash. >> we have to watch it closely. it can get out of hand. >> in their part of new york, gas runs about 20 cents higher than the national average. it all adds up at the gas station when you're at the gas station at least once a week. >> we give our drivers the opportunity to, if they see a low price, get it while you can. >> drivers like herb dyson play a pivotal role in streamlining deliveries. >> years ago we simply as they get done we run them out.
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we route them and get them all ready. >> i want my drivers to make sure they use good timing and good use of the time. we definitely zone our orders. if we're in zone two, we take everything in zone two and a that at one time. >> some of the runs are being made in a more fuel efficient vans. >> we are filling up less with this vehicle, so you're seeing a change in the pockets. >> the costantinos adjusted their rates. they decided to raise the cost of local deliveries. >> we charge $7.95. that recently went up from $6.95. the $7.95 barely covers the cost of running the vehicle and not the time of the driver. >> while the increase wasn't dramatic, the move wasn't taken lightly. the costantinos know that passing on the additional cost
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may not be favorable to their bottom line. >> i'm not trying to make money off of delivery. i'm trying to give good customer service. being fair gets my customers coming back to me. >> christine mackey, the founder and ceo of zippy ice in charlotte, north carolina also wants to keep her customers happy but it hasn't been easy. >> we're trying not to raise our prices for our customers and it might be inevitable if it keeps climbing but we're trying not to do that. >> zippy's fuel costs are up about 30% and mackey and her husband, howard, say they have no idea what's going to happen next. >> i don't want to say you're rolling the dice but every day, as somebody in business, you just have to have a little bit of faith. >> business that the 6-year-old company peaks during the spring and summer. dealing with higher prices during the winter has been a challenge. >> we rely on lower gas prices during this time just to even pay the bills. it's been really hard. we're trying to just kind of
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skate by during these months. >> like costantino's florists, zippy's trucks are consistently on the road delivering ice to places like gas stations, restaurants and bars, filling up both trucks can cost about $400. >> traditional delivery, wholesale delivery, direct store delivery, at the end of the day i have to get our great product to our customers. >> unfortunately, the price at the pump isn't zippy's only concern. the plastic bags used to haul the ice aren't getting cheaper either. >> they're made from petroleum which is impacted by the cost of gas. we started getting quotes in november for bags. they were about 6 cents a piece. now they're up to 9 cents. that's pretty substantial for us when we're talking 100 to 150,000 bags at one time. >> that's why the price of gas is driving certain parts of the
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business. >> we specced our truck on the cost of fuel. we had to. we're renting it, a long-term rental of a truck because of fuel prices. we could rent a brand new truck that has more fuel efficient features to it. >> howard mackey says they're always exploring other ways to navigate the jump in gas prices and that may mean going beyond outsourcing some of their production, getting new customers or finding the cheapest gas. >> this part of our business is so uncontrollable, so you've got to look at things that maybe you didn't look at last year and say, is it possible to gain a percentage here or half a percentage there? it might be. i'd like at every stone, turn it over. >> and carmen costantino agrees, as far as gas prices he says you must always be ready for the unexpected. >> it's the way you do business. you have to be flexible. i think in gas prices i don't
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you have to monitor it, know what's happening. you have to have a good bookkeeping system so you're aware of problems before it happens. those rise in gas prices are affecting a lot of our small business viewers. donna who owns a carpet cleaning company wrote us on facebook, we have two trucks and use between 150 and $200 a day on gas. we'll probably have to evaluate our pricing at the end of the month. steve, owner of crate works wrote us, the cost of shipping inbound and outbound is our biggest problem. trucking fuel surcharges are running around 24%. let's bring in our board of directors now to talk about this. eric is the editor in chief of i.n.k. and less is the author of the book "the sinner gist" how to lead your team to predictable success. great to see both of you guys. >> hi, j.j.
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>> the thing that struck me is the word uncontrollable. this is an uncontrollable expense. how do you prepare for something like that? >> that is the tough part. if one of your costs is fuel, you're in trouble. fuel costs are a rise on a global market. there's nothing you can do about it. there's nothing a president can do about it. one of the solutions i like is technology. use route optimization software to cut down the miles your truck has to go. there are lots of software programs, some key to small routes like, you know, ice delivery or flower delivery would be route savvy, c-2 logics, optitime. >> what about the idea of passing the cost along? so the woman from costantinos is i sag i want to be fair. in some ways they're not being fair to themselves. they're eating the cost. at what point do you pass it along and how do you do it in a
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way that doesn't lose you business. >> the least effective way is putting a surcharge on, even if it's a temporary surcharge. people don't like it, but they understand. their bill has just gone up. as far as looking at the cost side of the equation and reduce your cost per mileage as much as possible, what can you do to get more revenue from the bus or car or truck on the road. can you sell chocolates, candies, teddy bears, we've all seen the up-sale. it's harder when you have proprietary option. if you increase your value, that's better than sticking on a price hike that's obvious to people and hurts their wallet immediately. >> if you can't figure out a way to increase your revenue and presumably you're thinking about ways to increase your revenue,
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if you can't in the near term, and this is hurting you, what's your thought about putting a surcharge on and saying this is the gas surcharge versus just raising the prices a bit. >> i think a surcharge is the way to go. inflation in fuel charges is something something that everybody knows. they see it at the gas station, they pay it themselves. it's something they're well aware of. when you put a surcharge on, people say i know where that's coming from, they're not taking advantage of me and you're of the braing it's temporary. >> what about you? what do you think? >> we've all been on the other end of it. i think it's tough for the consumer to choke on it and if they can find another option, if somebody has buried it or upselling well, they may go elsewhere. also, competition, if you have two or three other smaller businesses, see if there's some way you can pool what you need to do. what goes around, comes around,
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is good for everybody. find a way other than sticking to the two $5 surcharge on. people resign against it. if they see somewhere else to go where they don't have to pay for it, they'll go elsewhere. >> appreciate your advice. this is a tough issue for a lot of people out there. we've talk about a few ways to cut your gas costs. here are five more ideas that should be on your list, courtesy of entrepreneur.com. one, shop around. prices do vary from station to station. a penny saved per gallon can really add up. two, use technology. gas comparison apps can help you get the best value. three, plot your route. use gps to know where you're going so you don't get lost. avoid left turns since they require more idle time than right ones. four, slow down. speeding burns more gas. so stay under the speed limit. number five, take training
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virtual. let your sales staff attend training via webinar or watch a recording later. earlier this week, president obama signed the jump start our business startups act, better known as the j.o.b.s. act into law. it makes it easier for small businesses to raise money through crowd funding. sherwood nies is the co-founder and part of a team of people that lobbied in washington. sherwood, thanks so much for joining us. >> thank you, j.j., good to be here. >> for people out there who don't understand what crowd funding is, can you give a quick explainer of how this will help your company. >> crowd funding is where a group of people pull together small amounts of money to help somebody with an idea come to fruition. in the case of crowd fund investing you'd be taking those same dollar amounts and investing them into a business. >> basically i have a new business idea, i put it on a crowd funding site and instead
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of going to an investor who will give me $100,000, i can get $1,000 from 100 people. >> right. you're going to take your idea, list your idea on a registered website, send the tweets out, put facebook updates to your social network. you're going to tell them about your idea, unless you hit 100% of your funding target no money will be exchanged. if you do, you have a great community of supporters and the money you need. >> and in exchange they get equity. it exists right now where they get a prize or token but now they have ownership in my company. what does that mean for me if i have these 1,000 strangers who have invested in my company? >> well, i think it means a few things. first and foremost, the most important thing to understand is that it means you have a
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community of people have that have a vested interest in your success. they want to know you'll be doing the right thing to help them get their money back. that's great. i've raised millions of dollars for a company i started. one of the ways in which i was able to raise more money, i had the community behind me to show these investors that i have people who believe in me. it's going to be a voice, it's going to be money and power to help get it to the next level. >> is there any fear that if you have all of these and people investing in your company that it will be harder to raise the next round? >> i love that question. i think there's a lot of misperception out there related to this. when we were raising money for pry mire company, when we took on more money, in each round, the previous investors were offered to be bought out at the round of that financing. what will happen or what we'll see in crowd funding companies investors will come in and say you paid 1x, we're going to come in at 3x. if you want to exit, we'll buy
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you out at 3x. believe it or not, many people will take them up on that offer. >> the law went into effect this week when can i as a business person or someone with an idea start this? >> that's another great question. it will be 270 days before the s.e.c. is done with its rule-making process. we'll be heavily involved in working with the s.e.c. we're working with the leadership group right now to help form an sro, sifra.org is the organization we think should be the self-regulating body to oversee the crowd funding program. >> sherwood, thank you so much for joining us. i know you could get loans through crowd funding before. it's the next interesting step in raising money to be able to give out equity as well. thanks for joining us. when we come back, interesting and fun small business stories for you. american entrepreneurs find their small business american dream in china. and forget about the easter
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bunny, this indianapolis entrepreneur found a niche that's hatching profits. you know, those farmers, those foragers, those fishermen.... for me, it's really about building this extraordinary community. american express is passionate about the same thing. they're one of those partners that i would really rely on whether it's finding new customers, or, a new location for my next restaurant. when we all come together, my restaurants, my partners, and the community amazing things happen. to me, that's the membership effect. the pursuit of entrepreneurial opportunity has always been a part of seeking out the american dream.
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some small business owners have found it but in another part of the world. our friends at nbc's rock center recently travelled to china where small business owners from the u.s. are finding success. >> it can feel like cleveland, ohio. it can feel like san francisco. it can feel like terre haut, indiana. but in actuality you're in beijing, china, half a mile from tiananmen square. >> my name is carl, i'm from cleveland, ohio, and this is my brewery, great leap brewing. we met other companies, lost and found, there's the veggie table that deals in 100% vegan menus, drinks and everything and there's home plate barbecue that do texas-style, southern-style smoked meats and barbecue. fascinating things that are
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starting to represent the american entrepreneurial spirit in beijing which before was lacking. >> so every day i leave my house and walk to the brewery. most of these alleyways are 100 to 200 years old. a lot of culture and a lot of history here. we first opened to the public on october 2 rcnd, 2010. the first night we sold two kegs and we thought that was amazing. now we move on average 30 to 40 kegs a week. i don't think i could do this in the states the way we did it here. you look at cleveland or pittsburgh, you're talking about urban center, 300,000 to 400,000 people and there's a dozen or two microbreweries per city. here there's 22 million people that live in beijing and as of 2011 we were it. >> in one of our beers we use
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peppercorn. you'll see spices you'll never see in america. >> usually when you come here, the best part is making banter with the vendors that run the stores. the vendor gave me his opinion of obama, which he thought he was very evil. but he thought my chinese was very good. we split the difference. he seems look a nice guy. i think we've already started something that will inspire a lot more people to do craft brewing. i'm very proud that they were the first. when there's a chinese brewery that makes a beer that's better than mine, that will be one of my proudest accomplishments. >> that's delicious. >> eric and les are with us once again. bill writes i want to the expand my marketing marketing company to include hotel ownership. i'm think of a unique type of
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hotel near to the beach. how do i find an investor. >> he's right to go to an angel. unlike a venture capitalist, is investing his own money, he can be a little more emotional, invest from the gut. i would say some of the things you want to do is in this case stay local. there are lots of angels in every town. they're usually retired executive who is have money to invest and look for someone who has that kind of interest. someone who has been in the hotel business before, in that part of geography. >> it's tricky because you can't go to an angel group with an investment like this. those are usually focused on tech. >> you can find a couple if you work real hard. google is your friend. there's a lot of good google networks. you can do a lot of hard work
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and get there. the thing i would most worried about is the pitch. i would lose the first initial clause of the premise. every sophisticated angel investor has heard, we're really good at w and we want to do x. drop the relationship to the manufacturing company and say i want to open a hotel on a beach and here's why it will work and go find your funders. >> let's move on, this is about marketing your business on a budget. >> how does a small manufacturer compete in a changing marketplace with shrinking margins and huge companies funding huge ad campaigns and marketing that's not available to a small manufacturer? >> you know what i love about this is you actually can and it's easier to do is now more than ever, you can go up against
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the big guys, what's your advice to him? >> i would start with an attitude adjustment. i don't mean it to be disrespectful. it's not helpful to solving the issue, which is an important one, by taking the stance, what can i do against the big guys? what have i got that they're trying to numb? and the answer usually is closeness to the customer. what you've got that the big guys haven't got is your closeness to the customer. the ceo of your fortune 500 companies isn't going to visit the customers. you can. think what are they trying to beat that i've got? what's my competitive advantage? and it's usually closeness to the customer. you've got to make the most of that. >> that's right. les is totally right. you shouldn't compete on the big company's ground and the other advantages you have when you're small? speed, you can get around, fill orders faster, take smaller orders and you can be closer to the customer. a key fact. >> this is an email, i get a lot
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of inquiries from overseas, where the buyer wants to have his credit card processed over the phone rather than through pay pal and they request their own personal shippers for pickup. >> what i want to get at is not what is the answer, but where does somebody find the answer to something like this. where can they look? >> i would checked with pay pal and found out if this was a usual competitive advantage or a competitive request that they were hearing. and they were very suspicious. as you would expect them to be. but i think there are things like this that we have written about at "inc." that are scams and i would be suspicious about this. particularly the personal shipper. if you don't have a record of your shipment arriving at the dress, that's often a bad sign. >> i would split the two issues. first of all, under no circumstances am i going to
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change the process of where i'm going to get paid, once i see the money in my account and cleared. once i see that, i might be more flexible in shipping. having come from britain, there can be local shippers that are a lot cheaper than bringing the big boys in from overseas, but i would only explore the possibility, once i was absolutely sure that i had the payment channel sorted. >> this was great advice and if any of you out there have a question for our experts, all you have to do is go to our website. the address is openforum.com/business. hit the ask the show link. or if you'd rather, you can email your questions or comments, yourbusiness@msnbc.com. >> as we've said so many times on this show, coming up with a unique twist to differentiate your business from similar ones
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can be the key to success. that's exactly what one indianapolis business school grad did when he hatched an idea about a new kind of limo company. reporter scott swan from nbc affiliate, wthr has the story of a chicken obsession turned into a small business. >> a lot of people have a look of disbelief. >> in a world of sleek and fancy limos -- >> here he comes! >> this saturday? >> let me check. >> john barker gets the call when people are looking for a different way to travel. >> chicken limo. >> it's clucking! >> what is it? >> behind us we've got the one and only chicken limo. >> the city's most unusual ride. >> it's 9 chicken limo. >> is everything it's cluck up
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to be. >> it's a '96 stretch town car with a giant chicken on the top. >> everything looks plain. until you see a chicken wagon limo. >> chicken limo was an idea hatched by a grad from the iu kelly school of business. ♪ ♪ >> did you ever think in your wildest dreams you'd be running the chicken limo? >> no, never. >> the chicken limo is a head-turner. >> does that sound of a chicken. >> yeah, i've got my chicken. >> when it arrives. >> the rooster. >> you see it -- >> cook a doodle do. >> he's fierce looking and he's ready to party. >> what kind of partying are y'all doing here? >> happy birthday. >> you would expect the chicken limo to be a hit with children. >> it's great for kids' birthday
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parties. >> we have the chicken limo. >> but the fierce-looking bird is a huge draw for adults. >> the chicken limo. >> gets rented out to all ages. >> it's clucking! >> for her 80th birthday, we figured it would be a good thing. >> listen to the chicken. >> chick's gone wild. >> when the inside is fuelled with adult beverages -- >> get clucked up. >> the chicken limo becomes one giant party. >> what's going on inside this limo? >> what happens in the chicken limo stays in the chicken limo! >> this business may expand beyond its nest in indianapolis. >> i want to franchise out, even go global if i can. >> videos can be a great way to market online. but they don't always translate
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into more business, to bring your videos to the next level, check out our website of the week. viewbix.com helps you make your videos count by inserting interactive customize abable apo your videos. they can be added to your site or shared across the web. to learn more about today's show, just click on our website. it's openforum.com/yourbusiness. you'll find all of today's segments plus web-exclusive content with more information to help your business grow. you can also follow us on twitter, it's @msnbcyourbiz. and don't forget to become a fan of the show on facebook. next week, we'll talk to some top retailers and consultants about how to wow them with your windows. >> people wonder what's going on with the windows and what's happening inside the store.
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>> the simple secrets to keeping your store windows looking good. until then, i'm j.j. ramberg, and remember, we make your business our business. they have names like idle time books and smash records and on small business saturday they remind a nation of the benefits of shopping small. on just one day, 100 million of us joined a movement... and main street found its might again. and main street found its fight again. and we, the locals, found delight again. that's the power of all of us. that's the power of all of us. that's the membership effect of american express.
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